Lessons in supply chain transparency

Three years ago, we founded Transparency-One. From the start, our mission has been to create a healthier, safer, and more sustainable world through innovative supply chain management. Trends and technologies have transformed the CPG industry over the years; here are some insights we’ve learned.

1. Blockchain isn’t always the answer

Many people come to us wanting blockchain. They’ve heard the buzz and want to know how blockchain can improve or revolutionize their supply chains. But the truth is, focusing on blockchain is a misguided first step; supply chain transparency needs to come first. Businesses first need to know who is in their supply chain before considering adding this information to the blockchain.

Despite what the buzz may claim, blockchain is not the solution to supply chain transparency. It is a way to increase supply chain security by creating a permanent, immutable record of all supply chain interactions. It is also a way to communicate to consumers that you have confidence in your supply chain and that it can withstand scrutiny. However, blockchain is not a method for identifying the materials and businesses involved in your supply chains.

This is not to say that blockchain is unimportant—it can have considerable value for the right business at the right time. However, it is a consideration to be made after you have taken steps to increase supply chain visibility.

2. Different businesses have different needs

At Transparency-One, we often talk about “source to store” transparency, or identifying your entire supply chain down to the field, farm, mine, etc. However, depending on a business’ industry, priorities, and resources, “source to store” transparency is not always the end goal.

Of course, sometimes you do need to go down to the source. For some objectives, such as consumer communication, gathering supply chain data down to the source is necessary to demonstrate full knowledge of a product from the beginning of its life. This usually starts with one simple product.

However, sometimes businesses need to focus on identifying their immediate suppliers. Businesses in the consumer goods industry are starting to tackle transparency, but it is a task that takes time. Sometimes you need to start with simply identifying Tier 1 suppliers, especially for very large supply chains.

Other needs can also drive the push for supply chain transparency, such as compliance. Many regulations put pressure on businesses to comply with requirements for human rights, chemical use, and/or sustainability, among many others. For some businesses, the priority is gathering required documentation and ensuring suppliers comply with regulatory requirements as well as your own brand standards.

These are just some examples. The Transparency-One solution can address varied needs, whether you are a supply chain transparency expert or just getting started.

3. Basic needs remain the same

While business needs vary depending on priorities, goals, and resources, some fundamental needs remain the same to successfully achieve transparent supply chains.

Digitization: We live in a digital world. To manage supply chains in today’s global and fast-paced world, supply chains need to be digitized for easier management, collaboration, and communication.

Centralization: Centralizing all data in a single platform vastly simplifies supply chain management. Keeping data in separate silos, like spreadsheets, leads to ambiguities in terms of data’s freshness and accuracy. Centralization ensures all internal and external supply chain partners are aligned and rely on the same, up-to-date information.

Consumer-centric focus: Modern consumers expect more from businesses. In turn, businesses expect more from their supply chain partners. Today, the entire supply chain needs to meet higher expectations in terms of product quality, safety, and social responsibility.

New technologies and increased consumer expectations have changed the consumer goods industry—and more transformation is sure to come. As businesses evolve to adapt to the market, it becomes even more important to keep these fundamental insights in mind.